What changed
The AFA limit for subsequent transactions under the e-mandate framework has been raised from ₹5,000 to ₹15,000 per transaction. This change applies to e-mandates on cards, prepaid payment instruments, and UPI, and is effective from June 16, 2022.
What it means for you
Banks and payment system operators can now process recurring transactions up to ₹15,000 without requiring AFA for each subsequent transaction, streamlining customer experience for subscriptions and standing instructions. This may increase usage of e-mandates for higher-value recurring payments like insurance premiums or utility bills, but lenders must ensure robust customer protection mechanisms remain in place.
What you must do
- Update your systems to apply the new AFA limit of ₹15,000 for recurring e-mandate transactions on cards, PPIs, and UPI.
- Review and communicate revised transaction processing rules to relevant teams, including customer support and compliance.
- Ensure customer grievance and dispute resolution processes are aligned with the updated limit to handle any issues arising from higher-value recurring transactions.
Who it affects
All Scheduled Commercial Banks, Regional Rural Banks, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Payments Banks, Small Finance Banks, Local Area Banks, Non-bank Prepaid Payment Instrument Issuers, Authorised Card Payment Networks, National Payments Corporation of India
Does this change apply to the first transaction of an e-mandate?
No, the AFA requirement for the first transaction remains unchanged. The increased limit of ₹15,000 applies only to subsequent transactions in a recurring e-mandate series.
When does this circular take effect?
The circular is effective immediately from June 16, 2022, as it was issued under the Payment and Settlement Systems Act, 2007.
What types of payment instruments are covered?
The revised limit applies to e-mandates on cards, prepaid payment instruments, and Unified Payments Interface (UPI).